EULOGIOAMANGRODRIGUEZ INSTITUTE OF SCIENCE AND TECHNOLOGY

College of Architecture and Fine Arts

ARCHITECTURE DEPARTMENT
3RD FLOOR, CEAFA BUILDING, EARIST
NAGTAHAN ST., SAMPALOC, 1008 MANILA, PHILIPPINES

SOC SC 103 C: TAXATION AND AGRARIAN REFORM

Homework no. 1:

TAXATION AND AGRARIAN REFORM

Submitted by:
SANTIAGO, JERAMY KAYE C.
V-A1

Submitted to:
MAAM CECILLE

DEFINITION OF TAXATION
TAXATION : the action, process, or system of taxing people or things.
Further definition:
Taxation is the inherit power by which the sovereign state imposes financial burden
upon persons and property as a means of raising revenues in order to defray the
necessary expenses of the government. It is the imposition of financial charges or the
other levies, upon a taxpayer (an individual or legal entity) by a state such that failure to
pay is punishable by law.
A mode by which government make exactions for revenue in order to support
their existence and carry out their legitimate objectives.
Most pervasive and the strongest of all the powers of the government. Taxes are
the lifeblood of the government, without which, it cannot subsist.

HISTORY OF TAXATION
The first known system of taxation was in Ancient Egypt around 3000 BC 2800
BC in the first dynasty of the Old Kingdom. In Biblical times, tax is already
prevalent. According to Genesis 47:24:
But when the crop comes in, give a fifth of it to Pharaoh. The other fourfifths you may keep as seed for the fields and as food yourselves and your
households and your children.
Earliest taxes in Rome are called as portoria were customs duties on imports and
exports.
Augustus Caesar introduced the inheritance tax to provide retirement funds for
the military. The tax was five percent (5%) on all inheritances except gifts to
children and spouses.
In England, taxes were first used as emergency measures.
HISTORY OF TAXATION IN THE PHILIPPINES
During the Spanish period, new income-generating means were introduced by the
government such as the:

Manila-Acapulco Galleon Trade the main source of income for the colony
during its early years. It brought silver from Nueva Castilla and silk from China by
way of Manila.

Polo Y Servicio (Forced labor) the forced labor for 40 days, of men ranging
from 16 to 60 years of age who were obligated to give personal services to

community projects. One could be exempted from the polo by paying a fee called
falla (which was worth one and a half real).

Bandala one of the taxes collected from the Filipinos. It came from Tagalog
word mandala which means a round stock of rice stalks to be threshed.

Encomienda System are large tracts of land given to a person as reward for a
meritorious act. The encomienderos were given full authority to manage the
encomienda by collecting tribute from the inhabitants and govern people living on
it.

Tribute the residence tax during the Spanish times. It may be paid in cash or
kind, partly, or wholly. But in 1884, the tribute was replaced by the cedula
personal or personal identity paper, equivalent to the present community
certificate.

THE DEVELOPMENT OF THE COMMUNITY TAX

On January 1, 1940, American imposed the use of cedula, when Commonwealth Act
No. 465 went into effect mandating the imposition of a base residence tax of fifty
centavo and an additional tax one peso based on factors such as income and real
estate holdings. The payment of this tax would merit the issue of a residence certificate.
Corporations were also subject to the residence tax.
WHAT IS A CEDULA?
Cedula also known as residence certificate, is a legal identity document in the
Philippines. It is issued by cities and municipalities to all persons that have reached the
age of majority and upon payment of community tax, it is considered as primary form of
identification in the Philippines and is one of the closest single documents the
Philippines has to a national system of identification, skin to a drivers license and a
passport.
A person is required to present a cedula when he or she:
acknowledges a document before a notary public;
takes an oath of office upon election or appointment to a government
position;
receives a license, certificate or permit from a public authority;
pays a tax or fee;
receives money from a public fund;
transacts official business; or
receives salary from a person or corporation.

CEDULA DURING 1920s

CEDULA
THE PURPOSE AND IMPORTANCE OF TAXATION
The main purpose of taxation is to accumulate funds for the functioning of the
government machineries. No government in the world can run its administrative office
without funds and it has no such system incorporated in itself to generate profit from its
functioning.
The Governments ability to serve people depends upon the taxes that are
collected. Taxes are indispensable in the government operation and without it, the
government will be paralyzed.
Four (4) Rs of Taxation:
1. Revenue
The taxes raise money to spend on armies, roads, schools, and hospitals,
and on indirect government functions like market regulation or legal systems.
2. Redistribution
The transferring of wealth from the rich sections of society to poor
sections.
3. Repricing
Taxes are levied to address externalities; for example, tobacco is taxed to
discourage smoking and a carbon tax discourages use of carbon-based fuels.
4. Representation
Rulers tax citizens and citizens demand accountability from their rulers as
the other part of this bargain. NO TAXATION WIITHOUT REPRESENTATION.
IMPORTANCE OF TAXATIOn

Increase in effectiveness and productivity of the nation

Increase in the quantum of revenue collection
Improvement in services of the government
Improve employment at all industry verticals
Induction of modern technology into the system
Rationalization of terms and condition of the economic system and
Rationalization of employment terms and conditions

THE PHILIPPINE TAX SYSTEM

Tax Law in the Philippines covers the national and local taxes. National taxes refer to
national internal revenue taxes imposed and collected by the national government
though the Bureau of Internal Revenue (BIR) and local taxes refer to those imposed
and collected by the local government.
The 1987 Philippine Constitution sets limitations on the exercise of the power to tax.
The rule of taxation shall be uniform and equitable. The congress shall evolve a
progressive system of taxation. (Article VI, Section 28, Paragraph 1).

THE FORMS OF TAXES IMPOSED ON PERSONS AND PROPERTY

1. Personal, capitation or poll taxes
These are taxes of fixed amount upon residents or persons of a certain
class without regard to their property or business.
2. Property taxes
1) Real Property Tax an annual tax that may be imposed by a province or
city or a municipality on real property such as land, building, machinery,
and other improvements affixed to real property.
2) Estate Tax (Inheritance Tax) a tax on the right of transmitting property at
the time of death and on the privilege that a person is given in controlling
to a certain extent the disposition of his property to take effect upon death.
3) Gift or Donors Tax a tax on the privilege of transmitting ones property or
property rights to another or others without adequate and full valuable
consideration.
4) Capital Gains Tax tax imposed on the sale or exchange of property.
Those imposed are presumed to have been realized by the seller for the
sale, exchange or other disposition of real property located in the
Philippines, classified as capital assets.
3. Income Taxes
Taxes imposed on the income of the taxpayers from whatever sources it is
derived. Tax on all yearly profits arising from property, possessions, or trades.
4. Excise or License Taxes
Taxes imposed on the privilege, occupation or business not falling within
the classification of poll taxes or property taxes. These are imposed on alcohol,
tobacco, petroleum, mineral and on miscellaneous articles such as automobiles.

TWO OTHER TAXES:

1. Documentary Stamp Tax a tax imposed upon documents, instruments, loan
agreements and papers and upon acceptance of assignments, sales and
transfers of obligation.
2. Value Added Tax imposed on any person who, in the course of trade or
business sells, barters, exchanges, leases, goods, or properties, renders
services, or engages in similar transactions.
WHO SHOULD PAY TAXES?
1. Individuals:
a. Resident Citizen
b. Non-Resident Citizen
c. Resident Aliens
d. Non-resident Aliens
2. Corporations
a. Domestic Corporations
b. Foreign Corporations
3. Estate under judicial settlement
4. Trust irrevocable both as to trust property and as to the income

WHO OR WHAT ARE EXEMPTED IN PAYING TAXES?

The constitution expressly grants tax exemption on certain entities/institutions such as:
1. Charitable institutions, churches, parsonages or convents appurtenant thereto,
mosques, and non-profit cemeteries and all lands, buildings and improvements
actually, directly and exclusively used for religious, charitable or educational
purposes (Article VI, Section 28, Paragraph 3).
2. Non-stock non-profit educational institutions used actually, directly, and
exclusively for educational purposes. (Article XVI, Section 4 (3)).
Exempted to tax as stated in the Article 283 of Rules and Regulations
Implementing Local Government Code of 1991 (RA 7160):
Local Water districts
Cooperatives duly represented under RA 6938, otherwise known as the
Cooperative Code of the Philippines
Non-stock and non-profit hospitals and educational institutions
Printer and/or publisher or books or other reading materials prescribed by DECS
(now DepEd) as school texts or references, insofar as receipts from the printing
and/or publishing thereof are concerned.

DEFINITION OF AGRARIAN REFORM

AGRARIAN : of or relating to farms and farming; relating to fields or lands or their
tenure
: organized or designed to promote agricultural interests
REFORM

: to put or change into an improved form or condition

Further Definition:
Agrarian Reform is the rectification of the whole system of agriculture. It is
normally done by the government where it redistributes the agricultural lands among the
farmers in the country.
Agrarian Reforms comprises not only land reform but also the reform and
development of complimentary institutional frameworks, rural education and social
welfare institutions.

MEASURES OF AGRARIAN REFORM

Public health provisions

Family planning
Education and training of farmers
Reorganization of land reform agencies
Application of labour laws to agricultural workers
Construction of infrastructure facilities
Organization of voluntary associations
Provide employment opportunities for unemployed or surplus rural labour
Community development services

HISTORY OF AGRARIAN REFORM

Pre-Spanish Period

THE PURPOSE AND IMPORTANCE OF AGRARIAN REFORM